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President Obama created a stir late last month when he launched a campaign to end the practice of corporate tax inversions. This tax strategy, which has been thrust into the spotlight by several recent high profile international corporate mergers, involves a U.S. company acquiring a foreign company and then moving its U.S. tax domicile to the foreign company and its lower-tax home country.

One of the higher profile examples keeping this once obscure tax practice in the headlines is an ongoing effort by activist investors to get Co. to move its Chicago headquarters to Switzerland, where it is estimated that they would save $4 billion in taxes over the next five years. Over the last ten years, 47 U.S. companies have done inversions, up from 29 in the decade prior. Nine of these have occurred so far this year by companies including Chiquita Brands International and drug maker , Inc.

The President does not like this tactic. Speaking last week at the Los Angeles Technical College, President Obama invoked the concept of economic patriotism, commenting:

“Even as corporate profits are higher than ever, there’s a small but growing group of big corporations that are fleeing the country to get out of paying taxes. They’re technically renouncing their U.S. citizenship, they’re declaring their base someplace else even though most of their operations are here. You know some people are calling these companies 'corporate deserters.'”

In a follow-up interview with CNBC, he explained further: “This is basically taking advantage of tax provisions that are technically legal.”

And that’s where the story starts to get a little complicated.

In fact, under current U.S. tax law, it is perfectly legal to move a company’s headquarters to a lower-tax region of the world.

As large public companies continue to become more and more globally oriented and live under the constant pressure to show corporate earnings growth each quarter, the idea of moving the headquarters to another jurisdiction is not such a crazy idea. Some have even argued that these companies have a responsibility to make moves like this if they increase shareholder value.

Former New York City Mayor Rudy Giuliani instantly took to the airwaves to turn Obama’s speech into a political flash point, telling Fox Business:

“With these public companies, the management of the company has a fiduciary, legal obligation to produce a profit. If he’s [President Obama] going to take the highest amount of taxes in the world from them and they can make a better profit for their shareholders – who include a lot of pension holders, by the way, a lot of retirees – they are obligated to do that. They can’t just ignore the fact that the tax rate in the U.S. is confiscatory compared to Ireland, compared to the rest of the world.”

All politics aside, Giuliani’s comments do expose a Catch 22 for U.S. business leaders and start to explain why many of them have been acquiring Irish companies at an astonishing clip. According to Thomson Reuters data, the surge in overseas mergers and acquisitions by U.S. companies has driven a six-fold rise in the value of deals in Ireland in the first half of the year. Mergers taking place in Ireland accounted for nearly 20% of all European transactions for the first half of this year.

Is it unpatriotic for a company to move its tax domicile to Ireland if that gives it more upside earnings potential? Is it better or worse if that company is acquired with overseas profits that have not been repatriated back to the U.S.? Would a comparable surge in investment flow into U.S. companies if the corporate tax rate were brought more in line with places like Ireland and Switzerland?

Although taxes have been wrapped up in an awkward dance with patriotism pretty much since the Boston Tea Party, the fact is that in the contemporary business environment where margins are thin and competition is fierce, tax is not a matter of patriotism. It is a line item, one that is weighed against dozens of other line items when tax, finance and corporate strategy teams make business decisions.

Corporate tax reform in the U.S. has been debated for decades and has remained a kick-the-can-down-the-road issue. Maybe the increase in inversions – and the prospect of significant lost tax revenue -- will be the tipping point that spurs action in Congress.

Sparing decisive action on the U.S. corporate tax code, all of the talk of economic patriotism is just that, talk.